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Dustup Among French Economists

by afew Thu Mar 3rd, 2011 at 08:29:18 AM EST

A comment by BruceMcF in geezer in Paris's diary The New Normal: A "Managed Decline"? explains how mainstream economics holds sway in American academia:


The mainstream economics is ... both very scientistic (scientific appearing, albeit not scientific in fact) with its heavily abused statistics and its arcane mathematical modeling, and very convenient to the status quo under normal conditions.

After all, under normal conditions, helping to understand the dramatic change coming and getting ready for it is not required of social theory ~ under normal conditions, it is far handier to have a strong bias for explaining why those with economic power should be allowed to do whatever they wish to do, by virtue of an economic theory which is blind to economic power.

And the supplanting of economic theory which arrived at inconvenient conclusions and replacing it with economic theory that arrived at more convenient conclusions started ...[via] strategies that accounted for its growing prominence through the 50's and 60's ~ tapping military and business sources of incomes to establish "economic analysis" units in PhD granting institutions which both funded the generation of the next generation of PhD's and also tilted the votes in academic departments in favor of the number crunchers.

A bias in your favor in both generation of new PhD's and hires of new PhD's means that over successive generations you shift the theoretical predisposition of young academics, who do the bulk of the work in peer review, and therefore tilt the degree of difficulty in getting different sorts of work published in the "top" journals.

which seems to mirror what a large group of French economists is saying. Not that economics teaching and research in France was "captured" as early as in the States, but the stranglehold appears almost as complete. An article by Christian Chavagneux in this month's Alternatives Economiques tells the story of a revolt:

Du rififi chez les économistes françaisDustup among French economists - Christian Chavagneux - Alternatives Economiques
Pour caricaturer, disons que deux groupes s'opposent. D'un côté, les tenants de la science économique pure, pour qui le titre d'économiste ne peut être décerné qu'à ceux qui publient des articles en anglais dans des revues jugées de prestige et montrant une capacité à bâtir des modèles abstraits, à l'élégance mathématique reconnue. Dans leur épure, la réalité n'est bien souvent prise en compte que si elle confirme l'hypothèse selon laquelle les marchés obéissent en permanence à des forces équilibrantes, et, dans le cas contraire, comme une exception à la règle. De l'autre, ceux qui veulent tenir compte des rapports sociaux présents dans toute activité économique, qui n'hésitent pas à mobiliser l'histoire, la science politique ou la sociologie pour expliquer les phénomènes économiques et sont prompts à souligner la tendance des marchés à déraper.By way of caricature, let's say two groups are facing off. On one side, the defenders of pure economic science, for whom the title of economist can only be conferred on those who publish papers in English in journals that are considered prestigious, and showing the capacity for building abstract models of recognized mathematical elegance. In their blueprint, reality is often taken into account insofar as it confirms the hypothesis that markets permanently obey forces tending to equilibrium, and, when it doesn't, as the exception that proves the rule. On the other side, those who take into account the social relations present in all economic activity, who do not hesitate to mobilise history, political science or sociology to explain economic phenomena, and are ready to emphasize the tendency of markets to go out of control.
Au cours des dernières décennies, les premiers ont gagné et il est devenu de plus en plus difficile de faire carrière si l'on ne suit pas les canons d'une science économique qui se rêve l'égale des sciences dures, alors qu'elle reste essentiellement prescriptive.Over the last few decades, the former won, and it has become increasingly difficult to make a career if one doesn't subscribe to the canons of an economic science that fantasizes itself as equivalent to the hard sciences, although it's no more than essentially prescriptive.

So, very roughly speaking, neoclassical economists versus institutionalists. For the latter, events since 2007 have shown the former to be detached from reality, and should have set off a chain reaction in French academia, opening opportunities for debate and critical expression, not to mention jobs and funding for those whose feet are so much more firmly on the ground. But that has not happened. Neoclassicals rule. Still.

So the critics have joined together in attack, creating an association called AFEP, Association française d'économie politique (French Political Economy Association). Their immediate target is the agrégation, a qualifying exam for university teaching, that they accuse of being a filter for selecting supporters of the dominant theory. The bigger target is the National Universities Council (CNU), Section 5 - which selects PhDs for post-doc teaching appointments and decides on promotions. In particular, the rebels consider that Section 5 favours neoclassicals in terms of career profile and salaries, and favours research (scientific or scientistic, you choose) over teaching. The system tends to produce minimal-presence, non-teaching theorists who spend their time at international symposia schmoozing with editors from the top journals, getting paid bonuses for publishing in same.

AFEP had already gathered 450 members by the beginning of this year. The conflict seems sharp with the "official" society, AFSE, Association française de science économique. Yet AFEP is very reasonably focusing its criticisms on the impossibility of scientific work where there is no room for divergent opinions. "We can't even evaluate each other's work," says one of the AFEP's founders. "There is no longer a scientific community of economists."

The number of French university economists who are ready to take this stand is encouraging. And one of the ways to suck the compressed air cushion from out under Wile E Coyote's toes.
by afew (afew(a in a circle)eurotrib_dot_com) on Thu Mar 3rd, 2011 at 08:32:54 AM EST
the canons of an economic science that fantasizes itself as equivalent to the hard sciences, although it's no more than essentially prescriptive.
Hear, hear! Macroeconomics started out as and still is moral philosophy draped with a bit of mathematics.

Schengen is toast!
by epochepoque on Thu Mar 3rd, 2011 at 12:17:43 PM EST
[ Parent ]
Interestingly, the Post Autistic Economics movement (ultimately renamed Real World Economics also originated in France.

Is there a generational link? Have the students who launched the PAE movement graduated to researchers in the AFEP?

So, in what may be my last act of "advising", I'll advise you to cut the jargon. -- My old PhD advisor, to me, 26/2/11

by Carrie (migeru at eurotrib dot com) on Thu Mar 3rd, 2011 at 08:36:42 AM EST
I'd expect there to be some overlap there, given the headings of the petition from ? about ten years ago:

English translation of the French economics professor's petition

Petition for a Debate on the Teaching of Economics

This petition raises the following problems:

1. the exclusion of theory that is not neoclassical from the curriculum,

2. the mismatch between economics teaching and economic reality,

3. the use of mathematics as an end in itself rather than as a tool,

4. teaching methods that exclude or prohibit critical thinking,

5. the need for a plurality of approaches adapted to the complexity of objects analyzed.

There's a James K Galbraith article: A contribution on the state of economics in France and the world from 2001.

Unfortunately, the current movement resulting in the AFEP seems to show that nothing budged in the intervening years.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Mar 3rd, 2011 at 09:15:50 AM EST
[ Parent ]
Daily Kos: What did Adam Smith really have to say...


Smith actually wrote:

Markets could not flourish without a strong underlying moral culture, animated by empathy and fellow-feeling, by our ability to understand our common bond as human beings and to recognize the needs of others.
Adam Smith

oikonomia as if people mattered

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Thu Mar 3rd, 2011 at 09:49:32 AM EST
[ Parent ]
The Big Idea: Creating Shared Value - Harvard Business Review

Even worse, the more business has begun to embrace corporate responsibility, the more it has been blamed for society's failures. The legitimacy of business has fallen to levels not seen in recent history. This diminished trust in business leads political leaders to set policies that undermine competitiveness and sap economic growth. Business is caught in a vicious circle.

A big part of the problem lies with companies themselves, which remain trapped in an outdated approach to value creation that has emerged over the past few decades. They continue to view value creation narrowly, optimizing short-term financial performance in a bubble while missing the most important customer needs and ignoring the broader influences that determine their longer-term success. How else could companies overlook the well-being of their customers, the depletion of natural resources vital to their businesses, the viability of key suppliers, or the economic distress of the communities in which they produce and sell? How else could companies think that simply shifting activities to locations with ever lower wages was a sustainable "solution" to competitive challenges? Government and civil society have often exacerbated the problem by attempting to address social weaknesses at the expense of business. The presumed trade-offs between economic efficiency and social progress have been institutionalized in decades of policy choices.

Companies must take the lead in bringing business and society back together. The recognition is there among sophisticated business and thought leaders, and promising elements of a new model are emerging. Yet we still lack an overall framework for guiding these efforts, and most companies remain stuck in a "social responsibility" mind-set in which societal issues are at the periphery, not the core.

The solution lies in the principle of shared value, which involves creating economic value in a way that also creates value for society by addressing its needs and challenges. Businesses must reconnect company success with social progress. Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success. It is not on the margin of what companies do but at the center. We believe that it can give rise to the next major transformation of business thinking.

 What Is "Shared Value"?

A growing number of companies known for their hard-nosed approach to business--such as GE, Google, IBM, Intel, Johnson & Johnson, Nestlé, Unilever, and Wal-Mart--have already embarked on important efforts to create shared value by reconceiving the intersection between society and corporate performance. Yet our recognition of the transformative power of shared value is still in its genesis. Realizing it will require leaders and managers to develop new skills and knowledge--such as a far deeper appreciation of societal needs, a greater understanding of the true bases of company productivity, and the ability to collaborate across profit/nonprofit boundaries. And government must learn how to regulate in ways that enable shared value rather than work against it.

Capitalism is an unparalleled vehicle for meeting human needs, improving efficiency, creating jobs, and building wealth. But a narrow conception of capitalism has prevented business from harnessing its full potential to meet society's broader challenges. The opportunities have been there all along but have been overlooked. Businesses acting as businesses, not as charitable donors, are the most powerful force for addressing the pressing issues we face. The moment for a new conception of capitalism is now; society's needs are large and growing, while customers, employees, and a new generation of young people are asking business to step up.

The purpose of the corporation must be redefined as creating shared value, not just profit per se. This will drive the next wave of innovation and productivity growth in the global economy.

any good examples in France of ethically advanced companies of serious mass being advised by progressive economists?

or is this meta for now?

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Thu Mar 3rd, 2011 at 10:05:52 AM EST
[ Parent ]
What Is "Shared Value"?

"Shared value" is the amount of money that wealth extractors (rentiers and monopolists) extract from wealth creators (labour and investors).
In neoliberalism, we have huge amount of "shared values."
Is the price of labour the same as the value of labour? Of course not. We have a huge oversupply of labour compared to technology. And techology is cheap. Labour is cheap, capital is cheap, where does the money go? It walks like a duck, talks like a duck, it is a ??
In the ideal world, we would need very little shared values.

by kjr63 on Thu Mar 3rd, 2011 at 10:48:16 AM EST
[ Parent ]
GE? IBM? Examples of "shared values"? Just a new costume for the Neo-Classical Economists' own "Frankenstien" Market Monster.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Mar 3rd, 2011 at 08:46:02 PM EST
[ Parent ]
Think Mel Brooks and Young Frankenstein.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Mar 3rd, 2011 at 08:46:39 PM EST
[ Parent ]
a bit earnest isn't it?

then it is the hahvahd bizniz review, trying to get their heads around how to co-opt more terminology and twist it into pretzels.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Fri Mar 4th, 2011 at 07:54:29 PM EST
[ Parent ]

The Politics of Entitlement: David Brooks Will Decide When It's Time for You to Die

"We're going to be doing a lot of deficit cutting over the next several years," David Brooks announced, plurally, in their column in today's New York Times. Little-known fact: the byline "David Brooks" is produced by five guys named "David Brook." They all get together and agree on stuff!

David Brooks are very concerned about the budget lately. It is an ongoing theme.


Talking about the deficit is a way of cutting morality out of the discussion. Waste! Mismanagement! Incompetence! Unaccountable earmarks! These things are noise. The actual questions are: is money to be spent on people who do not have money? And where is that money going to come from?

There are people who do not have money. Some of them do not have money because they are children. Some of them do not have money because they are old or sick or otherwise unsuited for the labor market. Some of them do not have money because the labor market has stopped paying for the work that they know how to do in the places where they live. Robots and other machines can approximate the things these people used to do.

There are other reasons, too, which can seem less sympathetic. Some people prefer to spend their time obtaining and using mind-altering substances. (Other people may or may not classify that as being "sick.") Some people--some people--lack the personal initiative to get work. And so on. These people, nevertheless, also do not have money.


What happens when there is no money to give to the people who have no money? That is the moral question. It's fine to say that the old people should have saved more, they should have worked an extra job, they should have done without cable TV, they should have invested more wisely. Saying that doesn't change the fact that there will be old people who do not have money. These old people will believe that they need food and shelter and medical care.

Will they get it? At the arch-plutocrats' end of things, the Koch brothers' end, the end occupied by the most devout worshippers of Ayn Rand, the answer is: no. That's the goal. It's long since time for the sloppy, implicit, badly supported social contract to go away. Rich people have been trimming their contribution to the general revenue for decades now. They are not interested in paying the premium that keeps old people and ailing people or just backward people out of the streets. If the day comes that they have to travel to and from their various compounds in armored helicopters, they can afford the helicopters. It's not their problem.

David Brooks do not believe they are that kind of person. David Brooks are responsible. David Brooks care about the need to "invest" in "effectiveness" for all.

Alas, living is not effective. Employers have stopped paying people for their post-productive years. They have done this, welfare-capitalistically, with the sense that the cost and responsibility they are shedding will be picked up by...someone, somewhere.

Read the whole thing.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Thu Mar 3rd, 2011 at 11:01:45 AM EST
Powerful piece. Thanks.

Capitalism searches out the darkest corners of human potential, and mainlines them.
by geezer in Paris (risico at wanadoo(flypoop)fr) on Fri Mar 4th, 2011 at 02:49:03 AM EST
[ Parent ]
Sounds like String Theory.

So, in what may be my last act of "advising", I'll advise you to cut the jargon. -- My old PhD advisor, to me, 26/2/11
by Carrie (migeru at eurotrib dot com) on Thu Mar 3rd, 2011 at 02:56:26 PM EST
String theory - Wikipedia, the free encyclopedia
The theory has yet to make testable experimental predictions, which a theory must do in order to be considered a part of science.
by afew (afew(a in a circle)eurotrib_dot_com) on Thu Mar 3rd, 2011 at 03:36:55 PM EST
[ Parent ]
The Trouble with Physics
Subtitled the Rise of String Theory, the Fall of a Science, and What Comes Next, the book strongly criticizes string theory and its prominence in contemporary theoretical physics, on the grounds that string theory has yet to come up with a single prediction that can be verified using any technology that is likely to be feasible within our lifetimes. ...

Smolin suggests both that there appear to be serious deficiencies in string theory and that string theory has an unhealthy near-monopoly on fundamental physics in the USA, and that a diversity of approaches is needed. He argues that more attention should instead be paid to background-independent theories of quantum gravity.

So, in what may be my last act of "advising", I'll advise you to cut the jargon. -- My old PhD advisor, to me, 26/2/11
by Carrie (migeru at eurotrib dot com) on Thu Mar 3rd, 2011 at 04:20:07 PM EST
[ Parent ]
While it is fair to have reservations about recent developments in physics that look like tautology (think dark matter), it should be said that physicists in most cases try really hard to actually come up with a way to test their theories.

Whereas there is a whole body of theory in economics (and in the business world) that seems to set out to avoid testability by any means available.

For instance, Chicago economics will claim that the failures of, well, all of the times that they have been attempted is that there was not enough reform, that they were not tried enough.
It seems that Chicago economics claim that they will make things better only if you manage to make them entirely pure (which noone has apparently managed to do), but their explaining away the disasters in that way implies that any less than pure implementation would make things worse.

That makes for an interesting discontinuity. Chicago economics keep worsening things the more you try them (that has been tested), until you manage remove the very last molecule of impurity, when they would suddenly give you the optimal outcome (based on their claims). Uh?

I am yet to read something quite so flippant in physics.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Fri Mar 4th, 2011 at 08:45:55 AM EST
[ Parent ]
I suppose the question that arises is how long can a discipline keep funding an approach that does not generate testable hypotheses.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Mar 3rd, 2011 at 08:54:45 PM EST
[ Parent ]
As long as it's proponents can figure out plausible (and marketable) word games that offer apparent support.

As long as status and tenure accrues to it's players.

As long as Milty's Minions hang on over there at Chicago town showing the way.  

Capitalism searches out the darkest corners of human potential, and mainlines them.

by geezer in Paris (risico at wanadoo(flypoop)fr) on Fri Mar 4th, 2011 at 02:54:43 AM EST
[ Parent ]

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